Abu Dhabi Global Market unveils judicial structure

04 March 2014

New financial free zone, Abu Dhabi Global Market, is also looking to appoint senior management team

Abu Dhabi Global Market (ADGM), the emirate’s financial free zone being set up on Al-Maryah Island, is currently formalising the creation of its judicial system.

Ahmed al-Sayegh, chairman of ADGM, told delegates at the Global Financial Markets Forum in Abu Dhabi on 4 March, that the legislative infrastructure will consist of three independent authorities: a registration bureau, a financial services regulations bureau, and a court system.

“The formation of these authorities is currently under way, as is the appointment of the senior management team,” he said. “We are providing a robust, well-regulated platform enabling member companies to transact business within a tax-free environment and with the support of an internationally-recognised legal jurisdiction. The nature of the business transacted within the global market will, to an extent, be dynamic, determined by its members and evolve over time.”

The free zone is expected to launch a legislative framework similar to that of the Dubai Financial Services Authority (DFSA), which regulates the Dubai International Financial Centre (DIFC).

That was reflected in the appointment of Jan Bladen as executive adviser and programme lead in February, after previously serving as chief operating officer (COO) of DFSA.

Bladen is tasked with overseeing the development of ADGM’s strategy, which has been ongoing since December and includes consultations with the local and international financial community.

The formation of the free zone is set to significantly change the dynamics of the GCC’s financial industry. While with more than 900 financial institutions the DIFC has been the region’s incumbent financial centre for years, Abu Dhabi, Saudi Arabia and Qatar are emerging as challengers to Dubai. That could lead to shifiting dynamics once other regional centres are developed enough to compete with Dubai’s financial hub status.

But Al-Sayegh said the Abu Dhabi free zone intends to complement Dubai’s financial centre as a hub at the centre of the Middle East, Africa and South Asia.

So far the consultations have focused on managing wealth and assets locally and regionally, the potential for new investment areas through structural changes in the UAE’s pensions and insurance markets in the UAE, and the emirate’s abundance of natural resources, which could provide the basis for an active commodities market, he said.

The centre could also play a role in trading currencies, profiting from the emirate’s time zone advantage.

“ADGM will start to take a lead in financial markets from 7am to 11am [UAE time] when it will market-make and produce a price across a range of FX [foreign currency] and OTC [over-the-counter] products. Outside of these hours, it will offer a full range of financial services acting as a bridge between the markets in Asia and those in Europe,” said Mahmood Ebraheem al-Mahmood, chairman of ADS Holding, in August 2013. ADS is advising on the financial aspect of the free zone.

“ADGM will also offer for the first time in the region new financial products. ADGM will be able to host a full range of financial institutions, commodities and producers as well as local and regional service providers,” Al-Mahmood added.

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